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Monday, 14 January 2013

ARE INSURANCE POLICIES PERMITTED IN ISLAM -

As-Salaam Alaikum Wa-Rahmatullahi Wa-Barakatuhu
Insurance of one's life or possessions is haraam and is not permitted,
because it involves gharar (buying/selling something where it is not
known whether what is being bought/sold will actually be
achieved/delivered, or in what specific quantity, thus putting one�s
money at undue risk to being lost) and riba (usury, interest). Allaah
has forbidden all transactions that are based on riba, and all
transactions which involve deceit, as a mercy to this ummah, and to
protect them from that which may harm them. Allaah says (interpretation
of the meaning):

whereas ALLAH has permitted trading and forbidden Ribaa[al-Baqarah 2:275]
And it was narrated in a saheeh report that the Prophet (peace and
blessings of Allaah be upon him) forbade deceit. And Allaah is the
source of strength.

Abdullah b. Dinar narrated that he heard Ibn Umar (Allah be pleased with
them) saying : A man mentioned to the Messenger of Allah (may peace be
upon him) that he was deceived in a business transaction, whereupon
Allah's Messenger (may peace be upon him) said : When you enter into a
transaction, say : There should be no attempt to deceive.

Book 10, Number 3663: (Kitab-Al-Buyu- Book of Transactions)
If what is meant by submitting your papers to the insurance company is
that you have health insurance, or intend to take out health insurance,
you should note that this insurance is haraam, as is so-called life
insurance, because the insurance policy in both cases involves ambiguity
and a kind of gambling. This has been stated by the scholars in their
fatwas.

It says in Fataawa al-Lajnah al-Daa�imah (15/297):
A � It is not permissible for the Muslim to insure himself against
sickness, whether that is in a Muslim country or in a kaafir country,
because that involves ambiguity and a kind of gambling.
B � It is not permissible for a Muslim to insure his life or all or some
of his physical faculties, or to insure his wealth, possessions, cars
and the like, whether that is in a Muslim country or in a kaafir
country, because these are kinds of commercial insurance, which is
haraam because it involves ambiguity and a kind of gambling.
Shaykh Ibn Uthaymeen (may Allaah have mercy on him) said: Insurance
means that a person pays a certain amount to the company each month or
each year against an accident that may happen to the thing insured.

It is known that the one who pays insurance is losing in all cases, and
the insurance company may win or lose, because if the accident is very
serious and costs more than the money paid by the customer, the company
will lose, but if it is minor and costs less than the money paid by the
customer, or if no accident happens at all, then the company will win
and the customer will lose.
This kind of contract � i.e., contracts in which a person may win or
lose � is regarded as a kind of gambling which Allaah forbids in His
Book and mentions alongside drinking alcohol and worshipping idols.
Based on this, this kind of insurance is haraam. I do not know of any
kind of insurance based on ambiguity that is permissible, rather all
kinds are haraam, because of the hadeeth of Abu Hurayrah (may Allaah be
pleased with him) who said that the Prophet (peace and blessings of
Allaah be upon him) forbade transactions based on ambiguity.
And Shaykh Ibn Uthaymeen said:
Life insurance is not permissible, because if the angel of death comes
to the one whose life is insured, he cannot refer him to the insurance
company. So this is a mistake and foolish misguidance, and it involves
depending on this company instead of Allaah, because the person is
depending on the company, if he dies, to take care of his heirs, which
means depending on someone other than Allaah.
This is akin to gambling, indeed it is gambling in a real sense, and in
His Book Allaah mentions gambling alongside shirk, divination with
arrows and alcohol.
In the case of insurance, a man may pay money for years and years, and
he may lose it, but if he dies soon the company may be the loser. All
contracts in which there may be gains or losses are kinds of gambling.
From Fataawa �Ulama� al-Balad al-Haraam, p. 652, 653.
If you are forced to take out insurance and there is an accident, it is
permissible for you to take from the insurance company the same amount
as the payments you have made, but you should not take any more than
that. If they force you to take it then you should donate it to charity.
We advise you to fear Allaah and to turn to Him and make a lot of
du�aa�, for anyone who turns to Him will never be disappointed. And we
remind you of the words of the Prophet (peace and blessings of Allaah be
upon him): �Whoever is stricken with poverty and turns to people for
help, his needs will never be met, but whoever is stricken with poverty
and turns to Allaah, Allaah will send him provision sooner or later.�
Narrated by al-Tirmidhi, 2326; Abu Dawood, 1645. Classed as saheeh by al-Albaani in Saheeh al-Tirmidhi.